Microsoft Gives IP Indemnity to Its Embedded System OEMs

Redmond says it intends to strengthen and broaden the intellectual property protections it offers manufacturers and distributors.

Microsoft has moved to strengthen and broaden the intellectual property protections it offers those original equipment manufacturers and distributors across the globe that build and sell devices powered by its Windows Embedded and Windows Mobile software.
The Redmond, Wash. based software maker will announce Feb. 9 that this strengthened IP protection now includes the defense of OEMs and distributors against IP claims in every country Microsoft distributes or markets its Windows Embedded and Windows Mobile products; protection of patent, copyright, trademark and trade secret claims based on that software; and the removal of the monetary cap related to defense costs.
That move brings the IP protections provided to the more than 4,000 OEMs and distributors of Microsofts embedded mobile software, which is used in phones, ATM machines, retail point-of-sale systems, GPS systems, industrial robots and thin clients, in line with those already offered for Microsofts server and client products, partners and customers, David Kaefer, the director of Microsofts Intellectual Property Licensing Group, told eWEEK in an interview.

The move was welcomed by Boris Metlitsky, the senior vice president of product strategy and development at Symbol Technologies, who said that this is another tool to speed up the deployment of its latest enterprise mobility solutions and provide its customers with technologies that increase their competitiveness in their respective markets.

"By extending IP protection to the embedded and mobile device manufacturing space, Microsoft is helping ensure the integrity of our offerings and is allowing us to focus on the next wave of innovations," Melitsky said in a statement.
This latest move was part of Microsofts long-term plan to standardize its indemnification for channel partners and end customers, Kaefer said, adding that the process has been under way since 2003, when Microsoft removed monetary caps for its volume licensees and customers, after hearing that this was the top customer satisfaction issue for them.
"Then, in November 2004, we offered all customers the level of indemnification we were offering our volume licensees. We then switched gears into the partner community and realized that we had all these varying levels of indemnification depending on whether you were an OEM or a system builder or an ISV partner, and by last summer we had brought just about everyone up to one common bar, but we had difficulty slipstreaming in a lot of the folks in the embedded world," he said.
Read more here about Microsofts move to indemnify its PC OEM partners against IP attacks.
The biggest challenge for Microsoft with regard to the embedded market was that it needs great flexibility in the type of software it puts on devices and often needs to modify that software, in large part because many of the devices had small footprints and the software has to be fitted onto that.
"This speaks to why indemnification is so important for this channel: It is one where we allow changes to our software and this makes offering indemnification more challenging," Kaefer said.
Partners were covered under this latest indemnity unless "the partner alters a piece of source code and that piece of source code is the basis of an infringement claim. While the partner is still indemnified for all the unmodified source code, Microsoft does not indemnify them for the modified source code," he said.
This was reflected in the language used in the indemnity policy, which states that Microsofts obligations "will not apply to the extent that the claim or adverse final judgment is based on your altering the covered software," Kaefer said.
So, if a partner alters source code block X and then an IP holder makes a claim that source code block X infringes its rights, this would not be covered because the partner has authored the allegedly infringing code and not Microsoft, he said.
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Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at www.eweek.com.